Correlation Between Evolution and Evolution Gaming

Can any of the company-specific risk be diversified away by investing in both Evolution and Evolution Gaming at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Evolution and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evolution AB and Evolution Gaming Group, you can compare the effects of market volatilities on Evolution and Evolution Gaming and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Evolution with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution and Evolution Gaming.

Diversification Opportunities for Evolution and Evolution Gaming

0.98

Correlation Coefficient

Evolution  Evolution Gaming

Almost no diversification

The 3 months correlation between Evolution and Evolution is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Evolution AB and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Evolution is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Evolution AB are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Evolution i.e., Evolution and Evolution Gaming go up and down completely randomly.

Pair Corralation between Evolution and Evolution Gaming

Assuming the 90 days horizon Evolution is expected to generate 1.01 times less return on investment than Evolution Gaming. In addition to that, Evolution is 1.19 times more volatile than Evolution Gaming Group. It trades about 0.12 of its total potential returns per unit of risk. Evolution Gaming Group is currently generating about 0.15 per unit of volatility. If you would invest  7,237  in Evolution Gaming Group on June 21, 2025 and sell it today you would earn a total of  1,379  from holding Evolution Gaming Group or generate 19.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Evolution AB  vs.  Evolution Gaming Group

Evolution AB

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Evolution reported solid returns over the last few months and may actually be approaching a breakup point.

Evolution Gaming

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Gaming Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Evolution Gaming showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evolution and Evolution Gaming

The main advantage of trading using opposite Evolution and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution position performs unexpectedly, Evolution Gaming can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.

The idea behind Evolution AB and Evolution Gaming Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.